Although there are some specific details to keep in mind when forming a limited liability company (LLC) in Indiana, the process is both easy and affordable. By adhering to the following requirements, you can easily navigate the obligations required by the State of Indiana to form an LLC.
Interested parties must register with the Secretary of State by filing the necessary forms, paying the necessary fees and meeting all naming and formation requirements.
The requirements for forming an LLC in Indiana are as follows:
Registration. LLCs are required to file Articles of Organization with the Secretary of State, which can be done either online or by mail. If there is a name reservation application that was approved for the LLC, it must be attached to the articles when submitted. The Articles of Organization must include the following information:
- LLC’s name and principal address
- Registered agent’s name and address
- Duration, if applicable
- Type of management, i.e., member-managed or manager-managed
- Organizer’s name, address and dated signature
All forms must be submitted with the necessary filing fee.
Forms and fees. LLC registrants are required to complete and submit Articles of Organization to the Secretary of State. There is a filing fee that is about $90 for documents submitted by mail and another fee that is about $85 for documents submitted online. Fees must be paid upon submission of the documents and fees can change, check with the Secretary of State for the most current fees..
Timeline. General processing time is between three to five business days.
Naming requirements. Although LLC naming requirements can be confusing, by keeping two simple rules in mind, you greatly increase the chances of your preferred name being accepted: Simply choose a name that is distinguishable from other LLCs and remember to include specific required words.
You may opt to have a preferred name checked for availability before filing your LLC formation documents.
Formation requirements. To form an LLC, a registrant must first file their Articles of Organization with the Secretary of State. All submissions must be accompanied by the appropriate filing fee.
Next, an LLC with more than one member is strongly advised to have a limited liability company operating agreement among its members. This operating agreement contains the terms entered into by the members of the LLC and governs such critical items as the roles of each member, voting rights, who manages the LLC, how members are admitted or removed, dissolution of the LLC and procedures for amending the LLC operating agreement itself.
Please note that LLCs offering a specific professional service are obligated to contact the necessary licensing boards as mandated by state law.
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Starting an LLC in Indiana
Before forming an LLC in Indiana, you should understand what an LLC is and if it is a viable business structure for your company. To start, an LLC is a business structure that has flexible organization, is privy to tax efficiencies and provides limited liability for its members. Members may include individuals, corporations, other LLCs and foreign entities. One benefit of an LLC is that there is no maximum number of members. An LLC is also known as a ”hybrid” business structure in the sense that it brings together elements of a corporation and limited liability partnerships.
Begin the registration process with the Secretary of State by using the following checklist:
1. Decide on a name for your business. Most any name is acceptable as long as it ends with “Limited Liability Company” or any variation of its abbreviation—e.g., LLC or L.L.C.
A name may be reserved up to 120 days. You may file a name reservation application with the Secretary of State online or by mail, along with the required filing fee, which is about $20. All applications must be filed in duplicate. In the application, be sure to include the name to be reserved and the applicant’s name, address and dated signature. All reservations are transferable.
A preferred name may be checked for availability by accessing the Secretary of State’s website or by submitting a paper form by mail.
2. Assign an agent for service of process (also referred to as the resident agent). Registered agents are individuals or corporations authorized to do business in the state and that have permanent addresses in Indiana. Registered agents accept legal documents on behalf of the LLC and make sure its members are notified.
3.Get an Employer Identification Number (EIN) from the IRS. If there are two or more members in your LLC, your company will need to obtain an EIN from the IRS, for tax purposes.
4. Create an operating agreement. Although LLCs in Indiana are not required to have a limited liability company operating agreement, it is wise to have one in place with other members should your LLC have more than one member. The State of Indiana recognizes limited liability company operating agreements as governing documents.
5. Familiarize yourself with the LLC’s continuing legal obligations, specifically biennial reports. These reports must be submitted to the Secretary of State every other year following the year in which the LLC was formed. The reports must be filed in the anniversary month in which the LLC was formed. Submission of reports may be done online or by mail. All submissions must include the required filing fee that is about $30 if done by mail or about $25 if done online. Check with the Secretary of State for the most recent fees for biennial reports.
Filing an LLC and Fees
Following are the forms and fees that are required when starting an LLC in Indiana:
1. Forms. Those looking to form an LLC in Indiana must file their Articles of Organization form with the Secretary of State. The Articles of Organization must be submitted with the required filing fee.
2. Fees. The filing fee for Articles of Organization is about $90 if submitted by mail or about and $85 if done online.
3. Limited liability company operating agreement. Although the LLC operating agreement is not filed with the Secretary of State, it is a good idea to have one in place for LLCs with more than one member. This should be kept on file by the registered agent.
4. Taxes. LLCs in Indiana are treated as corporations, limited liability partnerships or single-member LLCs and are subject to federal income tax classifications. Depending on the type of taxation you opt to have for your Indiana LLC, the tax responsibilities are as follows:
a. An LLC treated as a limited liability partnership. These LLCs are required to file Form 1065 (U.S. Return of Partnership Income) and to show equal distribution of profits, losses and credit on a Schedule K-1 with the IRS.
b. An LLC treated as a C corporation for federal tax purposes. These LLCs are required to file Form 8832 (Entity Classification Election) and must opt to be taxed as a corporation. Next, they must file Form 1120 (U.S. Corporation Income Tax Return) with the IRS.
c. An LLC treated as an S corporation. These LLCs are required to file Form 1120S (U.S. Corporation Income Tax Return) accompanied by a report from each owner expressing the equal distribution of profits, losses and credit with the IRS.
d. An LLC treated as a sole proprietorship. These LLCs must report all business income and expenses via the sole proprietor’s personal income tax returns, Schedule C (Form 1040, Profit or Loss from Business) with the IRS.
You should always make sure to acquaint yourself with the state laws regarding taxation. Your LLC may be subject to other taxes depending on the kind of services your LLC may offer.